Proposed Federal Fracking Rules Favor Industry
The Interior Department has released a new set of proposed rules that would mandate use of an industry-funded website for disclosure of chemicals used in hydraulic fracturing on public and Indian lands. In announcing the rules at a Thursday press conference, Interior Secretary Sally Jewell dismissed environmentalist concerns over the process, commonly called "fracking."
"Fracking has been done safely for decades," Jewell told reporters in a conference call. "There is no doubt that this essential tool will be used for decades to come."
The new proposed rules are a redrafting of rules first offerd for public comment in 2011, when they were roundly criticized. If adopted in their new form, they would mandate that companies disclose chemicals they use to fracture geological formations for increased extraction of gas and oil using the website fracfocus.org, managed by the Interstate Oil and Gas Compact Commission (IOGCC) and the Groundwater Protection Council (GWPC) in close cooperation with energy extraction companies. Several states already mandate the use of FracFocus for fracking companies.
The site has taken serious criticism in recent weeks, most devastatingly in the form of a report by the Harvard Law School's Environmental Law Program that concluded:
FracFocus prevents states from enforcing timely disclosure requirements, creates obstacles for compliance for reporting companies, and allows inconsistent trade secret assertions. Furthermore, the reliance on FracFocus by numerous states as a de facto regulatory mechanism sends a strong signal to industry that careful reporting and compliance is not a top priority.
Asked by a reporter to respond to the Harvard Law report on the conference call, BLM Principal Deputy Director Neil Kornze said that the new proposed rules would use FracFocus "not as a compliance tool, but as a disclosure tool." Kornze didn't detail how that's a useful distinction, given that disclosure would be required in order to comply with the proposed rules.
That required disclosure would occur only up to a point. The traditional corporate objection that the chemicals they pump into geological formations are protected trade secrets would be codified in the proposed rule. Drillers could keep the chemical ingredients of their fracking fluids concealed from the public as long as they file an affidavit with the BLM declaring those constituents trade secrets. The BLM would have the authority to demand confidential disclosure of the companies' trade secrets, but they wouldn't be required to do so, nor would they be able to disclose the results of those demands to the public.
And according to the Harvard Law School report, using FracFocus as a registry wouldn't help matters any:
Trade secret protection is critical in order to reward development of unique products in the marketplace. However, three characteristics of a robust trade secret regime prevent overly broad demands for this protection: substantiation by the company, verification by a government agency, and opportunity for public challenge. FracFocus has none of these characteristics; operators have sole discretion to determine when to assert trade secrets. As a result, inconsistent trade secret assertions are made throughout the registry.
The new proposed rules are now subject to a 30-day public comment period, and expansion of previous comment. Deputy Interior Secretary David Hayes pointed out that Interior could have released a final rule, but told reporters on the conference call that the department had decided to take the opportunity to refine the rules further. "Rather than go with a final rule," said Hayes, "we decided to go with a reproposal to get a new slice of public comment.
Interior seems alert to the certainty that this rule will be widely criticized. During the conference call, Secretary Jewell invoked the old "law of the excluded middle" in anticipating public reaction. "You will hear that we've sold out to industry with writing these rules. You will hear that we've bent to environmentalists. But these are rules that provide a common-sense approach to regulating fracking... As we continue to offer millions of acres of America's public lands for oil and gas development, it is important that the public has full confidence that the right safety and environmental protections are in place."
Requiring that companies make information about what they're pumping into the ground available on a government disclosure website rather than one funded by the industry being regulated might go a long way to instill some of that confidence.
